The Dow surged 426 points to a record close Friday, and all three major indexes posted weekly gains, as investors took comfort from data pointing to robust economic activity in the world’s biggest economy.
The Dow Jones Industrial Average finished at 44,296.51, up 1%, a day after soaring more than 450 points.
The S&P 500 gained 0.4%, while the Nasdaq edged up 0.2%.
For the week, the S&P 500 gained 1.68%, the Nasdaq rose 1.73%, and the Dow climbed 1.96%.
A measure of business activity raced to a 31-month high in November, boosted by hopes for lower interest rates and more business-friendly policies from President-elect Donald Trump’s administration next year.
The domestically focused small-cap Russell 2000 index rose 1.8% and outperformed large-cap indexes. The index advanced 4.3% for the week.
Meanwhile, Alphabet fell 1.7% following Thursday’s 4% drop, as the Department of Justice argued to a judge the company was monopolizing online search.
AI bellwether Nvidia also slipped 3.2% in choppy trading following its quarterly forecast on Wednesday.
“I’ve been looking for this leadership change to go from technology to everything else. I think we may be in the midst of that shift. Small caps are acting much better, values are acting better,” said Mark Hackett, Chief of Investment Research at Nationwide.
Expectations on the Federal Reserve’s policy move in December have recently swayed between a pause and a cut, as investors weighed the likely impact of Trump’s plans on price pressures.
There is a 59.6% probability the central bank will lower borrowing costs by 25 basis points, as per the CME Group’s FedWatch Tool.
Geopolitics were top of mind this week as investors monitored a missile exchange between Ukraine and Russia, after Moscow lowered its threshold for a nuclear retaliation.
The markets are also awaiting Trump’s Treasury Secretary pick.
“The fact that we’ve been calm on a nice, steady stair step pattern higher is very encouraging and reflective of the fact that investors aren’t acting with the emotion that they could be given the amount of uncertainties we’ve faced,” Hackett said.
In company news, Gap jumped 13% after the Old Navy parent raised its annual sales forecast and said the holiday season was off to a “strong start.”
Intuit fell 5.7% after the TurboTax parent projected second-quarter revenue and profit below Wall Street estimates on Thursday.